Dossier, Volume 14 #5: Three Economic Alternatives in Action

Antidote to Cutbacks and Forced Isolation

In these rather strange economic times, where plastic money has become the most common medium of exchange, a group of Kitchener-Waterloo residents have created a non-cash system as old as history--the barter system. A small, dedicated group of volunteers led by Suzanne Galloway and David Oppenheim, members of the Waterloo Public Interest Research Group, formed the Local Employment and Trading System (LETS) in 1995. Since that time the group has grown to more than 150 individual members, businesses and community organizations. In an economic climate where the name of the game seems to be cutbacks and "downsizing" with the resultant anger, alienation and forced isolation, a group like LETS allows people to continue to use their skills or practise new skills in exchange for whatever goods and services they need.

The medium of exchange is a "Green dollar" computer account to keep track of non-cash trading. Each new member begins with an interest-free line of credit in Green dollars and can begin to buy from other members right away. You earn Green dollars when the other participants use the goods and services you have for sale. The buyer credits the seller's account with the amount owed by phoning the LETS computer. Some members accept 100 per cent of payment in Green dollars, while others accept part Green dollars and part cash. The unique advantage of this barter system is that, rather than a direct buyer-seller trade, it allows a member to trade for any of the goods and services within the membership using their Green dollar account.

I am a piano technician working in the Kitchener-Waterloo and Parry Sound-Muskoka regions. Piano work is by its nature a solitary occupation--one of the reasons I chose it as a profession, as I enjoy having my own small business and being self-directed. I joined LETS when it was just starting up and have been pleasantly surprised at the sense of fun and community I have experienced at the various trade fairs and organizational meetings held during the last year. Members comprise every age group, from young artists and craftspeople to a semiretired carpenter in his seventies.

At tax time we have an accountant and bookkeeper; for aches and pains, a chiropractor; a mechanic for that old wreck in the driveway; a babysitter, electrician, photographer, tailor, tutor, cleaner and facilitator. We have a Jungian analyst, a vocational counsellor and a pasta maker. We have young artists, classical musicians and health consultants. If this sounds like an eclectic collection of skills, it is!

Glancing over my transaction record, which I receive once a month, my purchases included chocolate cookies, books, a new sign for my business, herbs for my garden, loaves of delicious homemade bread and handmade greeting cards. Last year I visited a chiropractor for treatment, purchased beautiful beeswax Christmas candles and talked with a computer consultant. All of this at no cost to me. On the credit side of my transaction record are the piano tunings and repairs I did, plus a couple of credits for items I sold at the LETS trade fair flea market.

LETS is not a tax evasion scheme. As a business I must still submit the GST and Ontario sales tax. Members are expected to look after their own taxes, although according to Revenue Canada, Green dollar income is taxable only if it is part of their everyday profession.

LETS trade fairs are open to the public to attract new members. They provide a venue for the self-employed members to test their products and receive consumer reaction. I use the trade fairs as a customer education program, advertising my piano care seminars and demonstrating the various piano parts, which I bring along to provide hands-on experience.

The LETS system has expanded from its modest beginnings in Comox Valley, B.C., to more than 500 groups worldwide. It was the brainchild of Michael Linton of Landsman Community Services, who envisioned a not-for-profit trade system modelled after similar for-profit systems in the United States. According to one estimate, the Green dollar will account for 30 to 40 per cent of the economy in Britain by the year 2000. The implications of this are mind-boggling. Is the Green dollar a new money system produced by the people who created it?

Significantly, well-placed small government grants to groups of volunteers across the country helped make this unique Canadian-born idea a reality. (Here in Kitchener-Waterloo, the Working Centre provided financial support and office space.) This has been money well spent, as LETS legitimizes the underground economy, providing tax dollars to the government which otherwise might remain uncollected. In my estimation, the success of LETS shows the fallacy of across-the-board government cutbacks, the product of bureaucrats who are unable to envision life and work as people in the real world are experiencing it as we approach the year 2000.